Snacks are a huge $1.2 trillion category, and it’s continuing to grow. Seventy-five percent of the global population snacks every day, while millennials snack four times a day. But consumers are looking for nutritious snacks. They want snacks with functional ingredients, great taste and low sugar.
Fermentation brands looking to grow need to transform their product into snackable sizes. Research by Mondeléz International’s new venture, Snack Futures, found that fruit and vegetables are the most popular snack item, but consumers want more than just a fresh apple. Innovation is key.
“Consumer obsession is driving a new model of snacking,” said Laura Shulman, founder and president of Food Future Strategies, Inc. From beverages to bars and bags to bites, “We’ve become this culture of serial snackers.”
At Natural Products Expo West, Shulman encouraged brands to be “snack innovators,” converting ideas to business.
Snacking’s Staying Power
The snacking surge is attributed to busier lifestyles – commute times are longer, more mothers are working and fewer people eat traditional three meals a day at home.
“Snacking is different than food. Snacking is a behavior. That behavior around the world is growing rapidly, and it’s growing much faster than center store [grocery aisle] food,” said Tim Coffer, chief growth officer at Mondeléz International. “We’re very bullish on snacking, and I think all of you should be, too, as you look for opportunities for growth.”
Snacking is disrupting the food industry, evident on the Expo West show floor where brands are seeing big returns on convenient, healthy food and drink products.
“The movement is more nutrient-dense snacks,” said Rohan Oza, co-founder and managing partner of Cavu Venture Partners. “Every company out there needs to be focused on how they create greater nutritional value on snacks that allow people to feel better about themselves.”
Brands as Health Warriors
Snacking of yesteryear evokes images of bags of potato chips or cans of soda. Those items are a far cry from modern snacking trends. Snacking must be nutritious because consumers are snacking with intention. They want snacks to be natural, simple, authentic and functional.
Brigette Wolf, global head of Snack Futures at Mondeléz International, said brands need to be “health warriors.” She encouraged brands to use medical and scientific studies and consumer research to “actively be the snacks of tomorrow.”
Growing Preference: Prebiotics & Probiotics
Consumers are also focusing on gut health. Research by New Hope Network found that sales of food and beverage with functional ingredients grew 7.5% in 2018 to $68 billion in sales. Probiotics and prebiotics are one of the fastest growing functional ingredients.
Kara Landau, founder of Uplift Food, was an Australian nutrition expert before starting her food company. Known as the world’s first dietitian created functional food, Uplift Food products are gut healthy, prebiotic snacks. The food brand was her dram, as Landau specializes in gut health. The connection between gut health and mood is especially important to her.
“I feel like there was this gaping hole in the market for someone to take that stance,” Landau said.
“Ultimately, I think the science is going to continue to catch up and help in terms of the claims that are being made,” Landau said about food with prebiotics and probiotics. “There’s only going to be benefits to consumer’s diets to getting more of that nutrition into their diet.”
8 Tips to Growing a Snack Product
Food industry leaders stressed that the brands of yesterday will not be the brands of tomorrow. Major food corporations are struggling to maintain sales as modern consumers search for healthier food, sustainable brands and startups with purpose.
Tips from Expo West “How Consumer Obsession is Driving A New Model of Snacking Innovation” panelists:
- Be consumer obsessed. Coffer with Mondeléz declared: “We are very clear who our boss is. … If you take care of the consumer, the rest of the stuff will fall right into place.”
- Reinvent testing. “The old model of how to innovate, how to test with consumers, that’s yesterday’s news,” Coffer continued. “Get with consumers – not in controlled environments.” Prototyping and testing needs to be at a much more rapid pace.
- Build a brand with a mission. Successful brands create a lifestyle around their product. “Build a culture out of it,” said Oza with Cavu Venture Partners.
- Don’t be cheap. Brands that have good ideas but aren’t spending the right budget amount to execute their plans are going to fail, said Oza.
- Remember: taste is king. “It’s America, we will not sacrifice on taste. In Japan, they certainly will. [But in America], you have to make it taste good,” Oza said.
- Experiment with ancient ingredients. From ashwagandha to turmeric, the ingredients of our forefathers are coming back into our food. “I think there’s room particularly in the states for taste buds to expand,” said Janet Planet, head of ideas at Fahrenheit 212.
- Start super small. Wolf of Snack Futures suggested putting a new product in a local yoga studio and see how people react. Give it to family and friends to test for feedback. Start with a small attraction, then go bigger.
- Convenience stores are ready for a disruption. Convenience stores are arguably the worst places today in terms of health food, but they’re still a hot spot for snacks.